Project Evaluation and Review Techniques (PERT)
Explore the concepts of PERT (Program Evaluation and Review Technique) in project management, including three-time estimates, Beta distribution assumptions, mean and standard deviation calculations. Discover how to create a more realistic project schedule by accounting for potential delays. Dive into an example demonstrating PERT calculations and critical path analysis.
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Presentation Transcript
BA 352 Week 3: PERT Program Evaluation and Review Technique
Stuff to Do Assignment 2: Due Today Assignment 3: Due Next Week ICE 2: Due Soon This Week: PERT ICE 3 Assignment 4
CPM Schedule and Scope How long should a project take? Which steps are critical? Concepts so far Crashing Schedule and Budget How can we speed up the project but at minimum additional expense.
The Elephant in the room So far we have assumed that activity times are CONSTANT. No variability. If a task is scheduled to take 7 days, it will take EXACTLY 7 days. Is this realistic? NO. Do tasks and projects get delayed? YES. Should we account for potential delays, and sometimes being early, to make a more realistic model? ABSOLUTELY. Our first attempt to make this work? PERT.
PERT: Three Time Estimates We assume that each activity has three possible times: Optimistic (early) labeled as a. Most likely labeled as m. Pessimistic (late) labeled as b. Example: Activity A usually takes about 7 days: m = 7. If we re really lucky, it could be done as early as 4 days: a = 4. If everything goes wrong, it could take up to 16 days: b = 16. Three time estimates.
PERT: We assume each activity follows a Beta distribution.
PERT: Calculations and Assumptions We estimate the mean and standard deviation for each activity with: mean = (a + 4m + b)/6 standard deviation = (b a)/6 Assumptions We use only the critical path (ignoring the rest of the project). We assume entire project is Normally distributed for calculations.
PERT: Example Act A B C D E F G H I J I.P. -- -- A A A B B D E,F G,I a (opt) m (most) b (pess) 7 5 12 8 2 5 9 9 6 7 4 4 8 5 1 3 6 7 5 5 16 10 20 12 We solved the example on the right previously with CPM, using only the most likely times. The critical path was ADH. The completion time was 24. All possible paths were: AC ADH AEIJ BFIJ BGJ 5 13 24 12 10 14
PERT: Questions Act A B C D E F G H I J I.P. -- -- A A A B B D E,F G,I a (opt) m (most) b (pess) 7 5 12 8 2 5 9 9 6 7 4 4 8 5 1 3 6 7 5 5 16 10 20 12 1. Estimate the mean and sd for each activity. 2. Estimate the distribution of completion times for the entire project. 5 13 24 12 10 14 3. Estimate the probability of completing the project early, in 20 days or less. 4. Estimate the probability of being late, 30 days or more. 5. When are we 99% certain the project will be done?
